1 of Wall Street's Favorite Stock to Keep an Eye On and 2 Facing Challenges

Wall Street is overwhelmingly bullish on the stocks in this article, with price targets suggesting significant upside potential. However, it’s worth remembering that analysts rarely issue sell ratings, partly because their firms often seek other business from the same companies they cover.

Unlike the investment banks, we created StockStory to provide independent analysis that helps you determine which companies are truly worth following. Keeping that in mind, here is one stock likely to meet or exceed Wall Street’s lofty expectations and two where its enthusiasm might be excessive.

Two Stocks to Sell:

Calavo (CVGW)

Consensus Price Target: $32.50 (48.3% implied return)

A trailblazer in the avocado industry, Calavo Growers (NASDAQ:CVGW) is a pioneering California-based provider of high-quality avocados and other fresh food products.

Why Do We Think CVGW Will Underperform?

1. Products have few die-hard fans as sales have declined by 17.2% annually over the last three years
2. Subscale operations are evident in its revenue base of $693.7 million, meaning it has fewer distribution channels than its larger rivals
3. Gross margin of 10.1% is below its competitors, leaving less money to invest in areas like marketing and production facilities

Calavo’s stock price of $21.91 implies a valuation ratio of 12.6x forward P/E. Read our free research report to see why you should think twice about including CVGW in your portfolio.

CoreCivic (CXW)

Consensus Price Target: $29.88 (57.4% implied return)

Originally founded in 1983 as the first private prison company in the United States, CoreCivic (NYSE:CXW) operates correctional facilities, detention centers, and residential reentry programs for government agencies across the United States.

Why Do We Steer Clear of CXW?

1. Number of average available beds has disappointed over the past two years, indicating weak demand for its offerings
2. Earnings growth underperformed the sector average over the last four years as its EPS grew by just 1.9% annually
3. Free cash flow margin dropped by 9.2 percentage points over the last five years, implying the company became more capital intensive as competition picked up

At $18.98 per share, CoreCivic trades at 15.2x forward P/E. To fully understand why you should be careful with CXW, check out our full research report (it’s free for active Edge members).

One Stock to Watch:

Commvault (CVLT)

Consensus Price Target: $193.36 (54.5% implied return)

Born from the need to create ironclad protection in an increasingly dangerous digital world, Commvault (NASDAQ:CVLT) provides data protection and cyber resilience software that helps organizations secure, back up, and recover their data across on-premises, hybrid, and multi-cloud environments.

Why Do We Like CVLT?

1. Billings have averaged 25.4% growth over the last year, showing it’s securing new contracts that could potentially increase in value over time
2. Software is difficult to replicate at scale and leads to a premier gross margin of 81.5%
3. Software platform has product-market fit given the rapid recovery of its customer acquisition costs

Commvault is trading at $125.19 per share, or 4.6x forward price-to-sales. Is now a good time to buy? Find out in our full research report, it’s free for active Edge members.

High-Quality Stocks for All Market Conditions

The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).

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